2015 (8) TMI 204 - AT - Service Tax

Waiver of pre deposit - Business Support Service - whether as per the agreement signed by the appellant with regard to hiring of high quality custom built equipment and facilities for R&D/software/BPO/IT operations would make it a provider of Business Support Service - held that - equipment and facilities like lifts, air-conditioning etc. went along with the building which was given on rent by it and therefore the service rendered was renting of immovable property service on which the service tax has been paid. Having regard to the facts that the dispute relates to classification of taxable service and an amount of ₹ 86,29,621/- towards impugned demand along with interest of ₹ 17,49,460/- stands deposited as acknowledged in the related show cause notice dated 13.9.2010, we are of the view that these deposits are sufficient to meet the requirement of Section 35F Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. Requirement of pre-deposit of the remaining adjudicated liabilities and stay recovery thereof during pendency of the appeal. - Stay granted.

Summary

Issues:
1. Classification of taxable service as Business Support Service or renting of immovable property service.
2. Whether the deposits made by the appellant are sufficient to meet the statutory requirements for waiver of pre-deposit of remaining adjudicated liabilities and stay recovery during the appeal.

Issue 1: Classification of Taxable Service

The appellant filed a stay application and appeal against an Order-in-Original confirming a service tax demand under Business Support Service. The appellant argued that the service provided was renting of immovable property due to the equipment and facilities provided along with the building rented for R&D/software/BPO/IT operations. The Tribunal noted the dispute regarding the classification of the service and acknowledged the deposits made by the appellant towards the demand and interest. The Tribunal found that the deposits met the statutory requirements, and therefore waived the pre-deposit of remaining liabilities and stayed the recovery during the appeal.

Issue 2: Sufficiency of Deposits for Waiver of Pre-Deposit

The Tribunal considered the appellant's contention that the service provided was renting of immovable property due to the equipment and facilities accompanying the building rented. The appellant had deposited a significant amount towards the demand and interest as acknowledged in the show cause notice. The Tribunal, in light of the deposits made, determined that the requirements of Section 35F of the Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994, were satisfied. Consequently, the Tribunal waived the pre-deposit of the remaining adjudicated liabilities and stayed the recovery during the pendency of the appeal, considering the nature of the dispute and the deposits made by the appellant.

By analyzing the issues involved in the judgment, the Tribunal found that the service provided by the appellant could be classified as renting of immovable property service rather than Business Support Service. Furthermore, the Tribunal determined that the deposits made by the appellant were sufficient to meet the statutory requirements for waiver of pre-deposit and stay of recovery during the appeal process. The decision highlighted the importance of proper classification of taxable services and the significance of meeting statutory requirements for pre-deposit in tax disputes.